Evolutionary Economics and Social Complexity Science 14 Toshio Yamada Contemporary Capitalism and Civil Society The Japanese Experience Evolutionary Economics and Social Complexity Science Volume 14 Editors-in-Chief Takahiro Fujimoto, Tokyo, Japan Yuji Aruka, Tokyo, Japan Editorial Board Satoshi Sechiyama, Kyoto, Japan Yoshinori Shiozawa, Osaka, Japan Kiichiro Yagi, Neyagawa, Osaka, Japan Kazuo Yoshida, Kyoto, Japan Hideaki Aoyama, Kyoto, Japan Hiroshi Deguchi, Yokohama, Japan Makoto Nishibe, Sapporo, Japan Takashi Hashimoto, Nomi, Japan Masaaki Yoshida, Kawasaki, Japan Tamotsu Onozaki, Tokyo, Japan Shu-Heng Chen, Taipei, Taiwan Dirk Helbing, Zurich, Switzerland The Japanese Association for Evolutionary Economics (JAFEE) always has adhered to its original aim of taking an explicit “integrated” approach. This path has been followed steadfastly since the Association’s establishment in 1997 and, as well, since the inauguration of our international journal in 2004. We have deployed an agenda encompassing a contemporary array of subjects including but not limited to: foundations of institutional and evolutionary economics, criticism of mainstream views in the social sciences, knowledge and learning in socio-economic life, development and innovation of technologies, transformation of industrial organizations and economic systems, experimental studies in economics, agent- based modeling of socio-economic systems, evolution of the governance structure of firms and other organizations, comparison of dynamically changing institutions of the world, and policy proposals in the transformational process of economic life. In short, our starting point is an “integrative science” of evolutionary and institutional views. Furthermore, we always endeavor to stay abreast of newly established methods such as agent-based modeling, socio/econo-physics, and network analysis as part of our integrative links. More fundamentally, “evolution” in social science is interpreted as an essential key word, i.e., an integrative and /or communicative link to understand and re-domain various preceding dichotomies in the sciences: ontological or epistemological, subjective or objective, homogeneous or heterogeneous, natural or artificial, selfish or altruistic, individualistic or collective, rational or irrational, axiomatic or psychological-based, causal nexus or cyclic networked, optimal or adaptive, micro- or macroscopic, deterministic or stochastic, historical or theoretical, mathematical or computational, experimental or empirical, agent-based or socio/ econo-physical, institutional or evolutionary, regional or global, and so on. The conventional meanings adhering to various traditional dichotomies may be more or less obsolete, to be replaced with more current ones vis-à-vis contemporary academic trends. Thus we are strongly encouraged to integrate some of the conventional dichotomies. These attempts are not limited to the field of economic sciences, including management sciences, but also include social science in general. In that way, understanding the social profiles of complex science may then be within our reach. In the meantime, contemporary society appears to be evolving into a newly emerging phase, chiefly characterized by an information and communication technology (ICT) mode of production and a service network system replacing the earlier established factory system with a new one that is suited to actual observations. In the face of these changes we are urgently compelled to explore a set of new properties for a new socio/economic system by implementing new ideas. We thus are keen to look for “integrated principles” common to the above-mentioned dichotomies throughout our serial compilation of publications. We are also encouraged to create a new, broader spectrum for establishing a specific method positively integrated in our own original way. More information about this series at http://www.springer.com/series/11930 Toshio Yamada Contemporary Capitalism and Civil Society The Japanese Experience Toshio Yamada Nagoya University Nagoya, Japan ISSN 2198-4204 ISSN 2198-4212 (electronic) Evolutionary Economics and Social Complexity Science ISBN 978-981-13-0516-0 ISBN 978-981-13-0517-7 (eBook) https://doi.org/10.1007/978-981-13-0517-7 Library of Congress Control Number: 2018951060 © Springer Nature Singapore Pte Ltd. 2018 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore Preface The aim of this book is to undertake a critical analysis of contemporary capitalism both in Japan and around the world, while on the one hand revisiting the ideas of civil society developed in postwar Japan and on the other hand adapting and devel- oping the conceptual framework of French régulation theory. Today, in the 21st century, the world’s advanced capitalist economies seem to have taken an abrupt turn away from the Fordism-style growth regime of the past and rushed headlong down the path referred to as “neoliberalism.” In doing so they have destroyed the old national growth/welfare regime centered on industry and ushered in a difficult era characterized by globalization, deindustrialization, finan- cialization, growing inequality and social cleavage. The Japanese economy, which passed through the first few decades after the war with rapid growth and an export offensive, is no exception. After its bubble economy burst at the beginning of the 1990s, Japan descended into “long-term stagnation,” and with an economy unable to respond to the “new social risks” created by the ongoing transformations of capi- talism, lifestyle insecurity among the general population and social inequality are continuing to grow. Regarding the various risks and the inequality created by these changes in the economy, there are demands for the voices of ordinary citizens to be reflected in politics through the democratic system and for these problems to be solved. Unfortunately, however, democracy is in significant decline and is facing its own crisis. In the name of “democracy,” populist and xenophobic emotions have taken center stage, while behind the scenes plutocratic lobbyists maneuver to make poli- tics their private possession. The crisis of democracy is not unrelated to the imma- turity of “civil society” in some countries and its decline in others. Capitalism must be democratized, and to this end it must be supported by a strong and sound civil society. The Western term “civil society” or bürgerliche Gesellschaft has a long history and has inevitably acquired many connotations. Several definitions come to mind. First, from Aristotle to Hobbes and Locke, it has referred to the “body politic.” Second, it has been used to refer to economic society as seen by Hegel and Marx (a system of division of labor and exchange constructed out of self-interested v vi Preface individuals). Third, from Tocqueville to Habermas’ “Zivilgesellschaft,” it has been used to describe “intermediary groups” or corps intermédiaires and the public sphere they form. In postwar Japan, however, the term “civil society” (shimin shakai in Japanese) followed a fixed path; beginning with a Marxist or Hegelian definition, the connota- tion of “commercial society” as described by Adam Smith was added, and a wholly original and unique normative concept was developed around this definition. The resulting civil society theory then went on to play an important role in postwar Japanese democratic thought. This book is an attempt to bring this unique Japanese concept of civil society to bear on a critical understanding of contemporary capital- ism. This is what is meant by its title, “Contemporary Capitalism and Civil Society.” Its subtitle is “The Japanese Experience,” and this refers not only to the Japanese experience of capitalism but also to our experience of this concept of civil society. This book includes eleven chapters divided into three parts. Part I “Postwar Japan and the Theory of Civil Society” includes three chapters. After presenting an overview of general trends in political economy in postwar Japan, I consider the unique civil society thought that blossomed in this country during this period, with a focus on two of its leading figures. In Chap. 1, “Political Economy in Japan After World War II,” I look back at the state of the social sciences, and political economy in particular, in Japan during the postwar period, and discuss the historical and social-scientific context in which Japanese civil society theory was developed. This chapter is based on the essay “Economic Development and Economic Thought After World War II: Economic Development and Marxian Political Economy,” included in Shiro Sugihara and Toshihiro Tanaka, eds., Economic Thought and Modernization in Japan, Cheltenham and Northampton: Edward Elgar, 1998, but I have made extensive additions to the original text for this book. In Chap. 2, “Yoshihiko Uchida and His Thoughts on Civil Society: Between Equality in Exchange and Equality as Human Beings,” I analyze how the concept of civil society inherent in Yoshihiko Uchida’s thought was deepened by this leading proponent of civil society theory in postwar Japan. This process of deepening is presented in the form of civil society as capitalism, civil society that is extruded from capitalism, and civil society that passes through capitalism. Uchida’s true vision lies where his concept of civil society finally came to rest, and I have tried to convey to the reader this preeminent achievement of Japanese civil society theory. This chapter was written for this book. In Chap. 3, “Kiyoaki Hirata and His Thoughts on Civil Society,” I discuss Kiyoaki Hirata, who came after Yoshihiko Uchida and developed a theory of civil society through a new interpretation of Karl Marx. Hirata’s scholarship led him to study Quesnay, Marx, and ultimately Gramsci and régulation theory, and in this chapter I trace how his concept of civil society was created, developed, and changed over time. This chapter is based on “Hirata Kiyoaki and His Thoughts on Civil Society,” included in The History of Economic Thought (The Japanese Society for the History of Economic Thought), 56(1), July 2014, with a few minor additions. Preface vii Part II “The Rise and Fall of Contemporary Japanese Capitalism” includes four chapters. Here I analyze Japanese capitalism from the postwar period to the present day using the methodology of French régulation theory. The keyword in this analy- sis is “companyism” rather than “Fordism.” Chapter 4, “The Introduction of Régulation Theory in Japan,” is a new essay. In the 1970s the “golden age of capitalism” had passed, and a new era of confusion and unemployment in developed countries was beginning. In this environment, Japanese capitalism made great strides by taking up the weapon of aggressive exports, and in the 1980s Japan even reached the point of being recognized as a “great economic power.” In the face of such transitions, existing economics lost its persuasiveness in Japan just as it did in other countries. It was under these circumstances that the régulation theory created in France began to attract attention, and in this chapter I examine the nature of the works through which this theory was presented in Japan. Chapter 5, “Postwar Japanese Capitalism and Companyist Régulation,” attempts an analysis of postwar Japanese capitalism inspired by régulation theory. Japan’s mode of régulation, which cannot be fully grasped using the régulationist keyword “Fordism,” is understood instead in terms of the concepts of “companyism” and “the companyist compromise,” and the key to understanding the postwar Japanese economy is sought in the fact that this “companyism” is effective in guiding investment-l ed and export-led growth regimes. The examination of companyism, looked at in another way, is in fact the examination of civil society. This chapter is based on “Japanese Capitalism and the Companyist Compromise,” included in Robert Boyer and Toshio Yamada, eds., Japanese Capitalism in Crisis: A Regulationist Interpretation, London and New York: Routledge, 2000, with exten- sive revisions and additions. Chapter 6, “The Collapse of Companyism and Today’s Post-Companyist Transformation,” traces the transformation the Japanese economy has undergone from the collapse of the bubble at the beginning of the 1990s to the present. During this period Japanese companies undertook striking overseas expansion and multina- tionalization. In the process, the Japanese mode of régulation characterized as “companyism” was clearly to a large extent destroyed. That being said, it is not as though at present a vigorous new mode of régulation and growth regime have been established. I refer to this current state as the “post-companyist transition” and com- pare it with the “companyism” it has succeeded. This chapter is based mainly on sections I contributed to two previously published articles, “How Has the Japanese Mode of Régulation Changed?: The Whereabouts of Companyism,” coauthored with Yasuro Hirano and included in Robert Boyer, Hiroyasu Uemura and Akinori Isogai, eds., Diversity and Transformations of Asian Capitalisms, London and New York: Routledge, 2012, and “Multinationalization of Japanese Firms and Dysfunction of Companyist Régulation,” coauthored with Yasuro Hirano and pre- sented at the International Conference on Research & Regulation 2015 held at the Université Paris Diderot in June of 2015. Chapter 7, “Analyses of Japanese Capitalism Based on the Régulation Approach: An Overview of Thirty Years of Research,” is a survey of 30 years of Japanese eco- nomics research based on régulation theory. The main topics it addresses are as viii Preface follows. (1) Was the high growth in the 1950s and 1960s Fordist? (2) How was Japan as an economic power in the 1970s and 1980s régulated? (3) What type of crisis has the Japanese economy been in during its long stagnation since the 1990s? (4) How is Japan situated in relation to other Asian countries? This chapter was written by adding content to “Analyses of Japanese Capitalism Based on the Régulation Approach: An Overview of Twenty Years of Research,” a paper pre- sented at the Yokohama-MFJ International Conference held in Tokyo at the Maison Franco-Japonaise in August of 2008. Part III “Theoretical Considerations of Contemporary Capitalism” includes four chapters. In them I consider several theoretical topics with a focus on the diversity of capitalism in the modern world, the dominance of neoliberalism, and the current state of affairs in countries with transition economies. Through this I anticipate the development of the régulation approach and further maturation of civil society. In Chap. 8, “Stage Theory or Typology?: Methodological Reflections on the Comparative Analysis of Capitalism,” I consider methodological questions that must be taken into account when discussing diversity in modern capitalism and the unique character of capitalism in Japan. Are the differences between capitalism in each country differences in these countries’ stage of historical development, or dif- ferences in their tracks or types? How should the temporal and spatial variance in each country’s capitalism be understood as a whole? My discussion of these ques- tions is based on “Methodological Reflections on the Comparative Analysis of Capitalism,” an article previously published in The Journal of Comparative Economic Studies (The Japanese Society for Comparative Economic Studies), 10, March 2015. In Chap. 9, “Economic Crises and Growth Regimes,” I attempt a theoretical examination of the dynamics of capitalism in time and space based on the régulation approach. In engaging in a historical/structural analysis of the modern world, I elu- cidate the importance of what are called the “comparative approach” and the “growth regime approach.” The chapter was written by substantially expanding my article “Economic Crises and Growth Regimes,” previously published in Hideko Magara, ed., Economic Crises and Policy Regimes: The Dynamics of Policy Innovation and Paradigmatic Change, Cheltenham and Northampton: Edward Elgar, 2014. In Chap. 10, “The Neoliberal Regime and Its Possible Crisis: A Reflection from the Viewpoint of Institutional Change,” I elucidate the strengths and weaknesses of neoliberalism in the current era, while giving an overview of the potential for crisis through, on the one hand, synthesizing growth regime and policy regime theories and, on the other hand, analyzing the mechanisms of gradual institutional change. Focusing in particular on the ways in which neoliberalism is destroying democracy, I emphasize the need to counter this by activating the “society principle” and invig- orating civil society. This chapter was written by making extensive additions to “Institutional Change and Regime Crisis: A Critical Viewpoint on Neoliberalism,” previously published in Hideko Magara, ed., Policy Change Under New Democratic Capitalism, London and New York: Routledge, 2017. Preface ix In Chap. 11, “Transition Economies and State Capitalism,” I address the fact that in recent years there has been a strengthening trend toward “state capitalism” in the socio-economies of nations transitioning from socialism to capitalism (particularly Russia and China). I attempt to understand this state capitalism as a particular type of mode of régulation – one arising out of the immaturity of civil society. Here this analysis is presented for the first time in English. On many occasions, including international conferences held in Paris, Grenoble, Turin, and many cities in Japan, I have received useful comments and helpful sug- gestions from a considerable number of friends and colleagues. In particular, I wish to express my deep gratitude to Robert Boyer, Hiroyasu Uemura, Hideko Magara, Bruno Amable, Nanako Fujita, Robert Chapeskie, and the Japan Association for Evolutionary Economics. I would also like to thank the publishers and editorial boards of the books and journals cited above for allowing previously published texts to be reproduced in this book. Nagoya, Japan Toshio Yamada July 1st, 2018